| Making a corporation or a sole proprietorship both | | | | actively manage funds, which resultantly create |
| need hard work, commitment, and money. There | | | | financial problems for the business. The proprietor |
| are different advantages and disadvantages of | | | | has no help in case of problem and is all alone in |
| making a corporation VS sole proprietor. Some of | | | | what he does to his business. The assets of the |
| the advantages of sole proprietorship are as | | | | sole proprietor business are very few, so raising |
| follows. It is easier to make a sole proprietorship. | | | | finances is a great problem in itself. |
| There are fewer documents required and also | | | | Corporation advantages are very important. First |
| fewer guarantees required. This significantly | | | | there is a limited liability and if the business |
| reduces the legal requirements. The capital | | | | defaults owners of the business are only liable up |
| requirements are also there for the corporations | | | | to the amount of investment made in the |
| in almost all the countries. | | | | business. It is easy to calculate taxes. With a lot |
| You don't need any capital requirements usually in | | | | of management it is not difficult to manage the |
| case of sole proprietorship. It is easy to maintain | | | | affairs. It is very easy in case of a corporation to |
| the documents in case of proprietorship and also | | | | raise funds through IPO's (shares) or other means |
| much easier to calculate the income as well as the | | | | as well. There are problems with making and |
| tax. The amount of money involved in sole | | | | running a corporation as well. The first problem is |
| proprietorship is comparatively many times | | | | that you usually aren't able to gather much |
| smaller, this makes easier to manage funds and | | | | money to form it initially. It takes a lot of |
| also to finance the business from external | | | | requirements and legal documentation to complete |
| sources whenever the need arises. There are | | | | and is under additional instructions of security and |
| however some disadvantages of making a sole | | | | exchange commission if it has to go public. It is |
| proprietor business as well. The first, the most | | | | very difficult to manage this much amount of |
| dangerous and obvious one is that the business | | | | activity. And corporations can be bought easily by |
| has unlimited liability. This means that if your | | | | share holders. These are some of basic |
| business fails then you have to pay back even | | | | advantages and disadvantages of both |
| through your personal assets which have nothing | | | | corporations and sole proprietorship to help you |
| to do with the business. Small financial | | | | make the right decision. |
| management often overlooks the need to | | | | |